PIERZ, Minn. — The path to commercial success is rarely linear.
Instead, it’s full of twists, turns and unexpected challenges — to which Tom and Jenni Smude can attest.
The Smudes, who own Smude Enterprises, makers of Smude’s Sunflower Oil, have turned necessity into a thriving business that is being recognized as Agriculture Utilization Research Institute’s Ag Innovator of the Year.
The Smudes operate a crop and cattle farm near Pierz. A drought in the late 2000s forced them to look for an alternative protein source for their cattle feed. Trucking in corn and soybean meal was expensive. The Smudes also wanted a crop that could perform well in the region’s sandy soils.
"We looked at the trucking costs for bringing protein in and thought ‘why not make it ourselves,’" Tom Smude said.
The Smudes began processing sunflowers to get the meal for their cattle and planned to sell the oil into the biofuels industry. Soon after they began processing, the price for oil dropped.
"The long-range plan was to bottle and sell the oil," Smude said. "Instead of doing it in three to five years, we were at it in a matter of months."
The Smudes grow and process high-oleic sunflowers. The seeds are higher in unsaturated and polyunsaturated fats and vitamin E than typical sunflower varieties. Those heart-healthy traits are desirable for baking and cooking and as food ingredients.
The Smudes shifted gears and began bottling and selling food-grade oil through retail outlets.
"My mom and a friend went to the farmers market in Onamia and came back with $77," Smude said. "Then I went to one in Isle on a Saturday and came back with about $400. That’s when I thought this might work."
Because they utilize a cold press process that uses no chemicals, the all-natural oil became a hit.
Smude’s Premium Sunflower Oil, including flavored and infused oils, can be found at hundreds of Midwest retail locations and can be purchased from their website.
"Their products are spot on with consumer trends," said Jennifer Wagner-Lahr, AURI senior director of innovation and commercialization. "They produce what many consumers are asking for and they’re about as close as you can get to getting it directly from the field."
Several years ago, the Smudes added microwave popcorn to their product offering. Their oil is already used by some movie theater chains to pop popcorn.
Adding their own product line was a natural progression.
"Most microwave popcorn on the market has a lot of different ingredients that are difficult to pronounce," Wagner-Lahr said. "The Smudes use popcorn, sunflower oil and salt. That clean label matches what consumers want."
"I feel like all we’ve done for the last eight years was the footprint to start the popcorn business," Smude said.
The Smudes began their operation on their 160-acre farm, but outgrew the production space and moved it into Pierz.
To meet the growing demand for their high oleic sunflower oil and popcorn, Smude Enterprises recently acquired a facility near their existing location. The new plant will help them expand from producing about 800,000 pounds of oil per year to 6 million pounds.
The Smudes have 23 employees now and expect to add 10 more in the next year.
The expansion provides an opportunity for other local farmers too.
Smude expects to contract between 800 and 1,000 acres of sunflower production in 2019. The following year, he estimates they will need 6,000 acres of production, and 10,000 to 15,000 acres by 2021.
For now, some of that production will have to occur outside of Minnesota.
"It’s hard to find enough acres locally, so we’ll have farmers from other states growing for us. Within the next year, we’ll try to get more local acres because our products are Minnesota made and we want them to be Minnesota grown," Smude said.
Innovation runs deep
In addition to Smude Oil, the Smudes also own and operate a grain handling equipment business and recently acquired Rich Prairie Custom Woods.
Sawdust from that operation will be mixed with dust and hulls from the sunflower seed cleaning process to heat the processing facility.
Besides a steep learning curve and risks, the Smudes success also required them to take a leap of faith as both Tom and Jenni quit full-time jobs along the way.
"My wife can see the future now," Smude said. "At first, I think she thought I was crazy, but she sees the potential now."